Revenue deposits pending adjudication are refundable beyond the final liability, and delayed refund carries interest.

Amounts deposited during investigation or pending adjudication were treated as revenue deposits, not final duty payments, so any excess over the liability finally sustained was refundable. The ordinary limitation for duty refund claims did not apply to such excess deposits, because the Revenue could not retain money that was never conclusively levied as duty, fine, or penalty. The Tribunal also held that interest was payable on delayed refund. The sustained penalty could be adjusted, but the balance had to be returned to the assessee.

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Issues: Whether amounts deposited during investigation and pending proceedings, if not adjudged as duty, fine or penalty, are refundable as revenue deposits without being hit by limitation under the refund provisions, and whether interest is payable on the delayed refund.

Analysis: Amounts paid during investigation or pendency of proceedings were treated as deposits made under compulsion of the proceedings and not as duty payments finally adjudicated under the excise law. Where the final adjudication did not sustain the entire amount, the excess could not be retained by the Revenue merely on the basis of the ordinary refund limitation applicable to duty claims. The amount ultimately sustained as penalty alone could be adjusted, while the balance retained beyond the adjudged liability was refundable. The Tribunal also granted interest on the delayed refund. The request relating to the bank guarantee was not adjudicated because it was outside the impugned orders.

Conclusion: The amounts deposited as revenue deposits were refundable to the extent they exceeded the amount finally adjudged, the refund claim was not barred by limitation, and interest on delayed refund was payable. The assessee succeeded.

Final Conclusion: The appeal was allowed with direction to refund the excess deposit after adjusting the sustained penalty and to pay appropriate interest on the refundable amount.

Ratio Decidendi: Amounts deposited during investigation or pending adjudication, when not finally levied as duty, fine or penalty, are in the nature of revenue deposits and cannot be retained by the Revenue without authority of law; the ordinary duty-refund limitation does not govern refund of such excess deposits.

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